Abstract
This paper presents evidence on intergenerational educational and occupational mobility in Rural China over a period of 14 years (1988-2002). To understand whether the estimated intergenerational persistence can be driven solely by unobserved heterogeneity, we implement biprobit sensitivity analysis (Altonji et al. (2005)) and heteroskedasticity based identification of Klein and Vella (2009). The empirical results show that there have been dramatic improvements in occupational mobility from agriculture to non-farm occupations; a farmer’s children are not any more likely to become farmers in 2002, even though there was significant persistence in occupation choices in 1988. In contrast, the intergenerational mobility in educational attainment has remained largely unchanged for daughters, and it has deteriorated significantly for sons. There is strong evidence of a causal effect of parental education on a son’s schooling in 2002. We provide some possible explanations for the dramatic divergence between occupational and educational mobility in rural China from 1988 to 2002.
Highlights
Intergenerational transmission of economic status has been the focus of a growing literature in economics
Using two rounds of Chinese Household Income Project (CHIP) household survey data for 1988 and 2002, this paper provides evidence on the evolution of intergenerational economic mobility in rural China
In a World Bank report, Piazza and Liang (1998) conclude that “despite the extraordinary success in basic education in China, many poor were not reached by the government efforts...in the poorer half of the townships of 35 counties supported by a World Bank projects, average enrollment was at least 10 % points lower than the national average for the same age group...". 42 The returns to education was, in contrast, very low under collective agriculture before 1978
Summary
Intergenerational transmission of economic status has been the focus of a growing literature in economics. There is a substantial literature on developed countries that shows significant persistence of economic status across generations; the estimated partial correlation between income of parents and children falls in the range of 0.3 to 0.6 (see Black and Devereux (2010), Blanden et al (2005) and Solon (1999, 2002), Mazumder (2005)). We use two rounds of Chinese Household Income Project (CHIP) survey data for the years 1988 and 2002 for the analysis of intergenerational persistence in educational attainment and occupational choices over a span of almost a decade and a half. The data in both 1988 and 2002 are based on almost identical questionnaires (2002 round has some added information), and are comparable. The evidence from the multivariate OLS regressions and AET sensitivity analysis is informative; it provides strong indication that, occupational mobility has improved dramatically in rural China, educational mobility seems to have deteriorated, especially for sons. The summary statistics of the explanatory variables for the full sample are presented in Appendix I
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
